Shawshank, VA 4/9/12 (StreetBeat) -- magicJack VocalTec, Ltd. (Nasdaq:CALL) ("the Company"), a cloud communications leader that invented voice over IP (VoIP) and sold over eight million magicJacks(R), today announced estimates for the first quarter ended March 31st, 2012, and that the Company intends to resume its share buyback program. The Company also confirmed that longtime Director Mr. Gerald T. Vento has been appointed Chairman.First Quarter Estimates and Comparisons
• GAAP revenue, net income and earnings per share (EPS) for the first quarter 2012 are expected to be approximately $37.4 million, $7.8 million and $0.37 respectively, before any adjustments (including one-time, extraordinary or non-recurring items). These numbers are preliminary and may vary up or down by 3% and 10% for revenue and income respectively. These numbers include a one-time positive adjustment of approximately $2.5 million realized upon implementation of billing rules for pre-purchased minutes. Excluding adjustments, the Company expects to earn approximately $0.26 per share compared to the average of the current analysts' estimates of $0.13 per share. If the Company used non-GAAP "cash" measurements like many other companies, EPS would be slightly higher.
• The Company's "other income" increased EPS by $0.04 compared to the prior average three trailing quarters. Some of this increase in "other income" is to be expected as the Company has significantly increased its cash position (including cash equivalents and investments).
• Deferred revenue at quarter-end is expected to be approximately $137.5 million and cash was approximately $60.5 million, both new records for the Company. The Company had 21,057,594 shares outstanding at the end of the first quarter and also continues to have no secured debt on its books.
• For comparison, first quarter 2011 revenue, net income and EPS were $30.8 million, $1.8 million and $0.08 respectively. The Company had cash balances of $49.0 million and 23,076,112 shares outstanding at the end of the first quarter 2011. Comparing first quarter 2011 cash balances to first quarter 2012 saw an increase of $11.5 million even after the Company bought back over 2 million shares in this time frame.
• The Company will file its full quarterly results with the Securities and Exchange Commission (SEC) on Form 10-Q in May.
Commenting on the Company's recent S-3 filing with the SEC, magicJack President Andrew MacInnes stated, "The Company recently filed a shelf registration statement as a new domestic filer to replace previous filings magicJack made as a foreign filer. Most sophisticated public companies keep a shelf on file to give them the greatest financial flexibility as market conditions warrant. The Company presently has absolutely no intention of raising money. In fact quite the opposite, we hope to repurchase the maximum amount available under our current large share buyback program. Management will also seek approval to increase the size of the buyback program by an additional $20 million. We are in the strongest financial position ever. To repeat, the Company will not be selling shares now and we will resume our efforts to repurchase the maximum number of shares possible and capture the tremendous value at the current low share prices for the benefit of all shareholders."
The Company also confirmed the appointment of Mr. Gerald T. Vento as Chairman of the Board. Mr. Vento has been a Director of magicJack, and prior to that YMax Corporation, since 2008 and has more than three decades of experience in cable, telephony and wireless businesses. Notably, Mr. Vento founded TeleCorp PCS, Inc. in 1996 and as CEO and Chairman sold the company in 2002 to AT&T Wireless at a valuation of $5.7 billion. Independent Director, and also very successful businessman and philanthropist, Mr. Donald A. Burns, has agreed to assume Mr. Vento's position on the Audit Committee of the Board of Directors.
With Mr. Vento's appointment, Daniel Borislow, CEO of magicJack, stated, "Gerry's vast business experience continues to prove invaluable to the Company and myself. With the Company becoming a domestic filer, it was appropriate that he move into this leadership role on the Board. We want to thank former Chairman Ilan Rosen, who helped guide us through the merger of VocalTec and YMax Corporation, for his service and dedication to the Company. Ilan also agreed that with the current growth and value of the Company Gerry should now be the Chairman and he made the sacrifice to make this happen."
The Company remains on track with previously announced initiatives and will give further updates as they get closer to materializing. The Company had previous expectations of 20% to 30% annual revenue growth in 2012 compared to 2011 and EPS of $1.25 to $1.50 and hopes to reach, and will exert extreme effort in an attempt to exceed, the upper limit of these estimates. magicJack remains confident that it will to achieve its stated goals outlined in prior press releases/filings and after currently announcing its financial expectations for Q1 2012, intends to immediately resume its buyback program.
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